Enel SpA, Italy’s largest utility, said first-quarter profit dropped 26 percent as Europe’s economic slump cut electricity sales.
Net income slid to 852 million euros ($1.12 billion) from 1.15 billion euros a year earlier after 125 million euros of writedowns, according to a stock-exchange statement. The Rome-based company said revenue fell 1.5 percent to 21 billion euros.
Economic stagnation in the company’s main markets in Italy and Spain is hurting earnings as clients reduce energy consumption. Enel said electricity sales in the quarter fell 7.1 percent to 76.7 terrawatt hours, while gas sales remained flat at 3.4 billion cubic meters.
The company said in March it’s planning 4 billion euros of cost reductions in Italy and Spain and 6 billion euros of asset sales to help cut debt to 37 billion euros next year. Net debt at the end of March was up 0.8 percent at 43.3 billion euros.
Enel Chief Executive Officer Fulvio Conti said in an interview on March 21 that he planned to battle stagnant profits in mature markets by shifting focus to faster growing markets in Latin America and Eastern Europe. The company currently gets about 60 percent of earnings before interest, tax, depreciation and amortization from Italy and Spain and the rest from Latin America, Eastern Europe and its renewable energy business.